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Monthly Archives: January 2016

Thank you very much for the opportunity to say a few words at the conference today.

I wanted to cover three things.

First, where the economy is today, and the problems we face.

Second, the huge challenge facing all those on the left in attempting to address these problems.

Third, how our movement can start to develop a convincing strategy to deal with this.

Co-operatives, shared ownership, and workplace democracy all have a central role to play here. We can’t turn the clock back.

We need a wide-ranging debate on the way forward.

Jeremy laid out some key ideas last weekend, in his speech to the Fabian conference.

At the heart of his argument is the case for fairness.

We currently live in an economy that is visibly failing on this score.

Co-operatives should, I believe, play an essential part in the economy of the future.

But we live in an economy held back by the past.

Wealth is more concentrated now than it has been for a century or more.

Social mobility has dwindled.

Financial legislation is being unwound and serious attempts at scrutiny scrapped, just a few years after the catastrophic crash that was the bankers’ responsibility.

Yet we have lived with a succession of governments who have promised the opposite.

They believed that by unleashing markets, governments would unleash opportunity and creativity.

This approach promised new freedom for individuals, free from the dead hand of the state.

The Tories promised a “shareholding democracy” would arrive through privatisation. A “trickle-down effect” would mean that, even if the rich got very rich indeed, everyone else would be a little better off.

But the promises of freedom and “popular capitalism” turned out to be illusory.

Today, share ownership by individuals is at the close to the lowest level ever recorded. Just 12% of shares are owned by individuals in the UK, down from 28% in 1982, and pension funds own only 3%.

So a “shareholding democracy” never happened.

What we saw instead was an immense concentration of wealth in the hands of the very few.

Today, 62 people own the same wealth as half the world’s population.

But the same process was arguably more sweeping in Britain than many other places.

We moved, on economist Thomas Piketty’s figures, from one of the most equal economies in the Western world, to one of the most unequal.

As a share of GDP, the state wasn’t shrunk. But it was transformed.

On one hand, government became more centralised. Local authorities, for example, were stripped of their powers.

On the other side, the state became more passive, just moving money from one place to another. So the share of public spending on social security has risen as that for investment has fallen.

And when our banks crashed, the state was there, in effect, to arrange an immense transfer of wealth for them, backed up with promises of more.

We bailed out the banking system, and stabilised the economy, at vast expense.

And caught up in the crisis was the Co-op Bank: an institution behaving too little like a co-op and too much like a commercial bank.

We are left with a world in which the fundamental promises of the free market approach have not been delivered.

Instead of a trickle-down effect, we have had a monstrous “trickle-up”. Instead of a more dynamic economy, productivity has slumped.

George Osborne, since becoming Chancellor, has squandered his chance to resolve any of these structural problems.

Employment in London has risen by 12%. Employment in the rest of the whole country is up just 0.3%.

Our imbalance with the rest of the world, the current account deficit, has reached record levels in the last twelve months.

After years of collectively repaying their debts, households have begun to borrow again.

Unsecured lending, the riskiest kind, on things like credit cards and payday loans, is rising rapidly. TUC research reports that the number of people with “problem debt” has risen by 700,000 in the last two years, to 3.2 million.

The gender pay gap remains stubbornly large, at 9.4%.

This is what austerity economics has left us with and, if it continues, the next Labour government will have to repair the damage.

We can’t turn the clock back

However, we need to be quite clear about this. Whatever the achievements of the past, we cannot simply turn the clock back – whether to 1997, 1964, or 1945.

We must defend, and we are defending, those achievements. The victory on tax credits was one part of that. We now have the fight of a generation in defence of our NHS and so much else.

A priority for the next Labour government will be in sustaining the good that has been achieved in the past.

But that isn’t enough. The changes that have been wrought in our society over that period of time are now so great that they impose the need for a profound shift in how we think about changing the world.

The reasons are well-known. First, what some still think of as the traditional working class has been shrunk. Manufacturing today accounts for just ten percent of all employment.

Only 14% of private sector workers are in a union.

The working class today is still the clear majority of the population. But it is far more fragmented. The ability to win a political majority by appealing to major sectional interests has waned as a result.

The forward march of labour hasn’t “halted”. But it has changed its uniform.

Second, there is the immense cynicism about our major institutions. Big business, banks, the media: none are trusted. But nor are politicians.

So whilst opinion polls report clear majority support for basic, longstanding demands like nationalising the railways, there is a deep cynicism about the capacity of government to deliver.

Put these two factors together, and they mean we’ve depended for too long on a strategy that looked only to the state as a vehicle for change.

The argument that came to dominate the left, from at least the 1930s, was a simple one.

First take the state. Then use the state to change society.

This simple proposition achieved an extraordinary amount. We live today with the legacy of what the labour movement and its party have achieved.

Some of our most enduring and popular institutions – the NHS outstanding amongst them – were the product of this way of thinking.

Capitalism, it was argued during the long boom after the Second World War, had been successfully tamed. It was no longer the brutal struggle depicted by its early critics.

Government intervention and the welfare state had smoothed its rough edges. Private property in production was no longer sacrosanct and giant corporations effectively planned and managed large chunks of the economy.

Government’s main task was to redistribute from a growing economy. Rising equality would follow.

Deeper questions of ownership, control, and democracy were left to one side.

Labour governments, Old and New, thought and worked like this.

So the post-war boom saw rapid economic growth and falling inequality under Old Labour governments.

New Labour, meanwhile, oversaw a decade of rapid growth, and restrained the growth of inequality.

Both approaches involved a compromise with the reality of capitalism in their day.

Their success, however, meant deeper questions about the economy were left unasked by the mainstream of Labour.

And that, in turn, left Labour governments unprepared for system-wide crises.

The first, in the 1970s, brought about the collapse of the global economic order that had sustained rapid growth for the previous thirty years.

The second, at the end of the 2000s, brought about the collapse of the financial system that had sustained rapid growth for a decade.

We are still very much living through the consequences of that second collapse. We may yet find ourselves confronted by what Bank of England Chief Economist Andrew Haldane has called the “third wave” of global crisis.

If New Labour made a mistake that Old Labour did not, it was to cede too much to the existing powers.

This compromise meant a Labour government had to rely on a fundamentally unsustainable model of debt-driven growth.

We need to change the rules of the game.

Left unchanged, we can see the direction of travel.

Rising inequality, as Thomas Piketty and others have suggested.

Increased environmental destruction.

The erosion of our basic civil rights, in our workplaces and outside them.

Our problem, today, is that we must learn to think systemically about the kind of economy we want.

And where our opponents now warn and threaten about the terrors ahead, we must present a positive case for the future we all want.

The charity Nesta published a fascinating piece of research recently, showing how “future-focused” the different party manifestos were in last year’s election.

The Tories talked relentlessly, overwhelmingly about the future. Labour, strikingly, did not.

We cannot allow that to happen again. We cannot be small ‘c’ conservatives.

But the future we want will be built on the best of what we do now. We learn from the past.

As anti-fascist writer Carlo Levi put it, the future has an ancient heart.

The co-operative tradition

If the old economic strategies have run their course, we must look elsewhere.

There is a long labour movement tradition of decentralisation and grass-roots organisation. But it has been somewhat hidden by the success of the alternative.

This radical tradition has deep roots in our collective history. From RH Tawney, GDH Cole and the guild socialists, back to the Rochdale Pioneers, the Society of Weavers in Fenwick, Ayrshire, and even further back to the radicals of the English Civil War.

With the stress on self-organisation and on-the-ground solutions to problems, this tradition stressed the need to organise not just to win the state.

Even in the successes of the state, however, we can see this tradition at work. Take the NHS, the crowning achievement of Labour’s greatest government.

But it was modelled on and inspired by the medical benefit fund in Tredegar – Aneurin Bevan’s home town. This was a fund set up by a local initiative to provide medical treatment to the local community. It was a hugely successful scheme.

Bevan said, when asked about his plans as Health Minister, that what he was doing was “extending to the entire population of Britain the benefits we had in Tredegar for a generation or more. We are going to ‘Tredegarise’ you.”

There is a thread within the labour and radical movement of self-organisation, running right back even before the Chartists to those early organisers for democracy against “Old Corruption”.

We have much to draw on here. A tradition and an argument within the labour movement that stressed not just the need to make demands of the state, and to implement top-down measures, but work from the bottom-up, can provide a natural fit with both the changed society we inhabit, and the changes we can see coming.

Technology is proving disruptive. It can have terrible downsides – deskilling and an accelerated concentration of wealth.

But it also opens up new possibilities – the explosion of sharing that the Internet can provide.

There is an entrepreneurial spirit at work here: not the theatrical meanness and one-upmanship of Gordon Gekko, but a desire to create something better for us all.

The expansion of co-operatives in Britain since the crisis, matching developments across the rest of the world, shows the potential. There are now more than 7,000 independent co-operatives throughout the UK, contributing £35bn to the economy.

Co-operative businesses are more stable. Whilst only one in three new businesses makes it through the difficult first five years, four out of five co-ops do.

An effective economic strategy for the left would look now to build on this.

It means thinking beyond using the state to redistributeincomes. It means thinking about how we can ensureassets are distributed more fairly.

Next steps

We can already see where this is happening. Local councils, pushed to their limits by spending cuts, have been forced to respond to deteriorating economic conditions.

Oldham Council has looked to develop its own responses to the crisis, working with Oldham Credit Union to reduce the burden of problem debt locally. Its Fair Employment Charter rewards local employers and looks to use local authority procurement to improve working conditions.

Enfield council in London has developed innovative contracting models with major local employers to support good jobs.

And Preston, inspired by the example of Cleveland, Ohio, has developed an extensive programme of work. Preston was one of the councils facing the very sharpest cuts to its funding out of any in the country. But they are responding creatively.

They have got major local employers and buyers – so-called anchor institutions, like the University of Central Lancashire – to drive through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally.

They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston.

And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands.

It’s inspiring to see Labour councils responding to profound challenges like this.

It is not enough to oppose austerity. We must also provide a vision of the future. In embryo, and in dire circumstances, some of what Labour local authorities are doing is precisely that.

But it is action at scale that can make the biggest difference.

What the central government does still matters – even if it cannot, and should not, do everything.

A future Labour government will end the current programme of spending cuts. We will protect what has already been won.

But we must look beyond this point. We should be seizing the opportunity to create a fairer, more democratic society.

Osborne wants to make the government smaller, blindly hacking away at essentials like flood defences.

We think government should be smarter. That means recognizing the limits of central government – but recognizing also when it can help.

It’s not about flipping Osborne on his head, and simply increasing government spending. But we know there are some things government can do better.

Vital infrastructure spending has fallen under this government. Labour will invest, and invest across the whole country.

A fairer economy requires a fairer tax system. The great majority of people pay their taxes because they know taxes sustain the services we all need. It’s part of what makes a good, functioning, fair society.

Yet we have large corporations and the super-rich apparently viewing tax payments as an optional extra. That can’t go on. Ultimately, it undermines the public services we all need – and forces the burden of taxation onto people less able to carry it.

We can’t pretend state spending is the answer to everything. There are clear limits on what can be achieved here. But we can make the system work far better, and distribute the burden more fairly.

My colleague Seema Malhotra is currently looking at the current system of so-called “tax expenditures” – the different get-outs and reliefs provided by the tax system.

A thicket of different schemes has grown up, costing the taxpayer £110bn a year. Some of this will be justified. But some of it will not be. We’ll look at whether we need to simplify the system so it is fairer to everyone and encourages the growth a fair and prosperous economy.

We’d create a fairer tax system, taxing assets in an economically efficient way. And we’d help create the conditions for a flourishing of co-operative entrepreneurship.

We’d work with our partners in the Co-operative Party to help bring this about.

The biggest hurdle faced in establishing co-ops is in initial funding.

Small businesses in general, and not just co-operatives, face dreadful difficulties in getting the funding they need from our high-street banks.

No other major developed economy has just five banks providing 80% of loans. We’d look to break up these monopolies, introducing real competition and choice.

Regional and local banks, prudently run and with a public service mandate, have to be part of the solution here.

With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we’d look to support these at a local level, working with local authorities, businesses and trade unions.

We will look into the recommendation in Graeme Nuttall’s report on employee ownership, creating a statutory right to request employee ownership and have proposals considered by their employers.

We should look to extend this approach, offering employees first rights on buying out a company or plant that is being dissolved, sold, or floated on the stock exchange.

The Tories have offered a “Right to Buy”.

Labour would seek to better this. We’d be creating a new “Right to Own”.

We will discuss these co-operative ideas as Labour’s “New Economics” lecture series, which we announced this week, is expanded across the country.

And as our policy development process rolls out over the next few years we will ask ourselves time and time again how the practical, everyday-socialist principles of the co-operative movement can be applied.

In an uncertain world where a laissez faire market approach continues to fail, co-operation is an idea whose time has come again.

This is the start of developing a new, positive economic alternative for Labour.

Barnet

Public Meeting with Shadow Chancellor John McDonnell

Mon 22 Feb, 7pm, Middlesex University

John McDonnell pays tribute to Barnet UNISON members and Save Barnet Libraries campaign

“ I want to pay tribute and send solidarity greetings to Barnet UNISON and Save Barnet Libraries campaign for their sterling efforts to expose and prevent the proposed widespread decimation of their Library service. The combination of strike action and the recent legal challenge is an inspiration to all of us fighting austerity policies up and down the country.”

Word is out amongst our members working in Libraries that the current fantasy library proposals could rapidly lead to potentially serious medical conditions for Barnet Library users which could add further pressure on our local NHS services and an increase in crime.

“Binge reading” – health risks

Staffless Libraries will mean limited access to Barnet Libraries for children under 16 and people with disabilities. Our library workers believe this will inevitably lead to an outbreak of “binge reading”.

“It’s just an awful condition which leaves the customer badly in need of a regular fix of more and more books. They get really desperate and just any book will do. It’s sad to see, they don’t care, it could be fiction, non-fiction, or even magazines. I knew one customer who only read hardbacks, but once he began binge reading he was taking anything he could get his hands on. I just don’t think our Council realises the risks it’s taking with their Library proposals” (Anonymous Barnet Library worker)

Under-age reading & crime

Barnet Library staff have reported their concern that as a result of restricted access for children under 16 to their local Library, there could be an increase of underage reading. One worker who wanted to remain anonymous said:

“It’s sad really, that the council has promoted a policy which could lead to underage reading. It leaves children at risk of exploitation. The idea that book pushers could populate the streets of Barnet is frightening. We know book pushers will not supply quality books, quite often it is cheap, poor quality books. But the books they push are addictive. I worry for young people, they should have access to high quality books available in a safe environment.”

John Burgess UNISON Branch secretary said:

“We have repeatedly warned the Council of the serious health and anti-social behaviour risks that could quickly sweep across our local communities. I believe there are well researched reports detailing the impact of binge reading on health outcomes which inevitably bring unwelcome pressure on an already overloaded NHS. The Council also refuses to accept the risk of increased crime as a result of under-age reading. The prospect of book pushers on the streets of Barnet fills me with dread. That is why I would encourage library lovers wherever you are to view this excellent Save Barnet Libraries Animation here https://www.youtube.com/watch?v=_3XfibjbJuA and Sign our Save Barnet Libraries Petition here

Housing Commission Report

Launch Event

Lack of affordable housing in Barnet is now one of the top 2 concerns for local people according to the council’s latest Residents’ Perception Survey.

People are finding it hard to get onto the housing ladder with average house prices in the borough at nearly half a million pounds. Private sector rents are the highest in outer-London with many rented properties poorly managed and maintained.

Homelessness is increasing, and with recent news that Barnet Council is set to increase council rents for new build to 65% of average open market rents from 30%, more and more people will find themselves trapped in a cycle of debt, eviction and homelessness.

Barnet’s Labour councillors have set-up a Housing Commission to look into how Barnet can increase the supply of affordable homes, and help improve standards in the private rented sector.

Our Commission is Chaired by Nicky Gavron AM, and is made up of independent housing experts, local community representatives and Labour councillors. You can find out more about our Commissioners here.

The Commission will meet at least six times over the next 8 months, and will be taking evidence from housing professionals, other London boroughs and the local community. The meetings will all be open to the public to attend.

Our launch event and first evidence session took place on Thursday 20 November at the Crown Moran Hotel on Cricklewood Broadway, with Guest Speaker Cllr Sarah Hayward, Leader of Camden Council – thanks to all who participated! You can see footage here from the meeting courtesy of the Barnet Bugle.

We held our second evidence session on Monday 1 December at the Rainbow Centre on Dollis Valley Drive, and heard evidence from private tenants’ rights campaigner, Jacky Peacock OBE, Roz Spencer, Rogue Landlord Taskforce Co-ordinator, LB Lewisham, Duncan Bowie, Senior Lecturer in Spatial Planning at the University of Westminster, Professor Marjorie Mayo & Ines Newman, authors of ‘Tackling the housing crisis‘ and Maria Brenton, co-founder of Older Women’s CoHousing (Owch). You can see footage from that meeting here – courtesy of the Barnet Bugle once more.

Our third evidence session took place on Monday 8 December at the Friern Barnet Community Library. We heard from Sarah Sackman – Public Law Barrister and Labour’s parliamentary candidate for Finchley & Golders Green, Alison Inman – Board Member of the Chartered Institute of Housing and the Tenant Participation Advisory Service, and steering group member of SHOUT (Social Housing Under Threat), Kate Murray – former Editor of Inside Housing and steering group member of SHOUT, Cllr Phil Glanville – Cabinet Member for Housing, LB Hackney and Cllr James Murray – Cabinet Member for Housing, LB Islington. Footage of this session can be viewed here – courtesy of the Barnet Bugle as ever.

Our final public evidence session took place on Thursday 10 September at 7.30pm – once again at the Park Road Youth & Community Centre, West Hendon. We heard evidence from Daren Nathan, Development Director at Durkan and Cllr Alan Strickland, Cabinet Member for Housing & Regeneration, LB Haringey.

Over September and October we have continued to take evidence from other London boroughs, and other organisations including housing associations in Wales, and so our report has been delayed and will be launched on Monday 25 January. To attend the launch event please RSVP here.

At the Hemingford Arms (off the Caledonian Road) Islington on Sunday February 7th, 7.30 to 10.30 pm

All Welcome

John Burgess talks a mile a minute, dresses in any colour as long as it’s black, and refers to other men as “lad” – even if they’re older than him. He’s also one of my heroes of 2015. Unlike most end-of-year gong-winners, Burgess is a name you won’t know. But if heroism is about being brave when it counts – about standing up straight even while others try to make you bend or break – he’s the real deal. And at a time when so much of the organised left is afflicted by loss of nerve, mind, or both, it is a relief to find someone who still has both.

For our purposes, Burgess’s story begins in May 2008 – at the point he was hoping to hang up his boots. After a long slog as branch secretary of Unison in Barnet, north London, he planned to return to his life as a local mental-health care worker. Then the Conservative-run council began offloading its key public services to big business – and he was thrust into the biggest battle of his life. Almost eight years later, he’s still defending jobs, campaigning against cuts, pointing out the expensive absurdities of outsourcing. Going back to care work? Nice dream.

To get an idea of the noxious politics at work, consider one of the big stories of the past few days. Conservative councillors in Essex unveil a plan to charge pensioners £26 for being picked up after a fall; newspapers pick it up; abuse is hurled by members of the public. The one man whose approval ratings go unaltered is the same one whose cuts make the whole outrage almost inevitable: George Osborne.

Thus is set the pattern for this decade. Somewhere near you, a sports hall will be closed down, a grandmother will lose her daily meals on wheels, the roads will sprout holes, and streetlights will go dark. Vast swaths of the public realm will either be abandoned or handed over to big companies to run at a profit. Each time, it will be the local council that wields the axe and faces down residents, although it’s merely following a course set for it around a table in Number 11.

When David Cameron won the May general election, the National Outsourcing Association released a statement welcoming his return. “Spending on public sector outsourcing almost doubled to £120bn under the coalition,” it observed. “We expect to see a plethora of new outsourcing deals … over the coming months now that the election is over and a secure government has been appointed.”

‘George Osborne has chosen local councils to take the biggest hit.’

The difference with true-blue Barnet, Thatcher’s backyard as MP, is that it elected to start on all this early in 2008, before the banks collapsed and the cuts began. Under the guise of encouraging open-market competition, it has handed over everything from school meals to cemetery upkeep to the private sector – mostly to the multibillion giant Capita. All of which makes John Burgess the advance guard for the rest of us.

Already other Tory councillors are looking at Barnet as the model for how they should outsource their services. How he fights this, the arguments he deploys and the tactics he uses, will help set the template for all the other fights to come.

I’ve written here before about Barnet and its role as the test lab for the rest of the public sector, with its key executives skipping off to run other councils. But what’s always struck me has been the sheer attack Burgess has brought to this most vital of campaigns. The armoury of contemporary trade unionism is sadly limited: a petition, some lobbying of dignatories, a lacklustre march, a strike, some variety of defeat. That’s not been Burgess’s way.

First, he sent local councillors briefings on the problems of outsourcing – every Friday for 20 weeks. Then he began working with academics and experts to produce detailed reports picking apart the financial illogic of the contracts. When the outsourced care service, Your Choice Barnet, had to be bailed out with public money it was like seeing their predictions made flesh.

So far, so ballsy. But the other thing Burgess has done is turn what could be merely an industrial dispute into a social movement. So there have been rock concerts against the cuts, and events with Russell Brand. Short cartoon films have filled in residents on what would happen once their services disappeared into the maws of Capita. He’s collaborated with bloggers and local non-union activist groups. And he’s done all of this in the face of a weak local Labour opposition and lukewarm support from his own union. “John’s become the real opposition in the borough,” says local blogger Mrs Angry.

I’ve lost count of the number of times I’ve heard or read about what trade unions and leftwingers should do across the country in this hostile climate. Columnists call for unions to engage with civil society, while Burgess gets on and organises marches to save local libraries that pull together Tories with former coal-miners from his birthplace of County Durham. Pundits demand unions work together, while he just works with PCS and Unite on local initiatives. Academics write about social-movement unionism, and he joins with local housing campaigns against social cleansing in Barnet on the grounds that “our members live here too”.

He does all this – and he’s also a carer to his mother, who has dementia. Sometimes, while planning the next action, he’s been summoned by panicky hospital staff to travel north and make sure everything’s OK. Then he comes back and just keeps on going.

If we are to save what’s left of the public sector from an acid bath of giant profiteers, user charges and historic cuts, we’ll need a lot more John Burgesses. I just hope we’ve got them.

This afternoon, MPs will vote on a proposed law. As a bit of policy, it is as belligerently incoherent as a drunk at 2am. As a piece of politics, it will harm millions of people, while making one of the gravest crises facing our country even worse. Yet I’m fairly sure this piece will be one of the few across the press and the BBC even to discuss it.

Granted, the housing and planning bill can never outdo the excitement surrounding the ups and downs of Hilary Benn, the new Mr Darcy of every wet-eyed columnist. But the UK housing market is a catastrophe so dire that it causes even Manhattanites to marvel. A recent Guardian interactive makes the point: any would-be homebuyer earning the national average of £26,500 will now find 91% of England and Wales beyond their reach. If you can’t buy, you rent – except in London, the epicentre of the madness where rents are so extortionate, newspapers compete for horror stories. Consider the £480 a month charged for a mattress in the corner of a communal lounge in a shed in the east end.

You don’t need me to lather on facts and figures. Anyone trying to get a toehold in the housing market, or whose children are, already knows how badly broken it is – and grasps the implications. How it gouges money from those who don’t own only to put it in the pockets of those who do. How it forces anyone from outside London either to accept that they won’t be able to pursue a modestly paying career there – or will have to grind out at least a decade of expensive squalor to do so. And how that makes the UK both more unjust and economically weaker.

David Cameron knows all this. He even makes speeches about how homes in Britain are unaffordable to Britons. The bill in front of MPs is meant to free up social housing for those most in need and to make land and funds available for builders to churn out more private homes. In reality, it will make private homes even more unaffordable while cutting further the stock of homes available below market rent.

‘The amount a council is meant to net from the sale of a publicly owned home will be set not by local surveyors but by Treasury officials.’ Photograph: Graeme Robertson for the Guardian

Look at the axe the government is taking to social housing. Before the 2010 general election, Cameron promised to “support” social housing while his soon-to-be ministers pledged to “protect social tenants’ rights and rents”. Now he’s phasing out secure tenancies for those same tenants. A couple living in a council home who earn a total of £30,000 a year (£40,000 within London) – that is, just above minimum wage – will be moved up to market rents. The Treasury will also force local authorities to flog “high value” homes once a family moves out. That spells the end for council housing in central London – specialists estimate that 60% of Camden’s housing stock and 70% of Islington’s would qualify as “high value”.

Couple it with what’s already happening in the private rental market – where poorer families are being pushed out to London’s perimeter, and you have a charter for turning the centre of the city into a rich-only enclave.

If this sounds like the sort of post-adolescent fantasy that would be sketched out in some Westminster thinktank, that’s because it is. Many of these policies have been lifted from the rightwing Policy Exchange. Until 2014 its former housing specialist, Alex Morton, churned out pamphlets such as Ending Expensive Social Tenancies, notably mainly for their flush-cheeked libertarianism, casual dismissal of the rights of those not on stellar incomes, and subheadings such as “Most people actually support forcing people to move from expensive properties”.

For such Rolls-Royce thinking, Morton is now paid somewhere between £53,000 and £69,999 of taxpayers’ money as a special adviser to the prime minister on housing policy – one of Cameron’s fleet of advisers whose salaries cost the public over £9m a year.

Anyone trying to get a toehold in the housing market, or whose children are, already knows how badly broken it is

But what sounds good at a conference fringe meeting doesn’t always translate into robust law, and the housing bill has more holes than all the golf courses in suburbia. Try this: the household income assessment of council tenants will be based on the previous year’s earnings. So a family could go through redundancy, divorce or even death and still be forced to cough up “market rents”. Or this: the amount a council is meant to net from the sale of a publicly owned home will be set not by local surveyors, but by Treasury officials. Or this: although the bill’s fixed-term tenancies are aimed at making social housing more flexible, it provides no viable mechanism for evicting antisocial tenants before the term is up.

These are just some of the howlers in a document drafted by the Department forCommunities and Local Government – the bit of Whitehall that will be almost obliterated in the spending cuts. As housing lawyer Giles Peaker says: “I seriously wonder who’s left in DCLG who actually understands housing law.”

The contradictions gape wider and wider. The government that plans to make more use of limited council housing also wants to sell council housing. The ministers who want to make work pay will also make work cost more for council tenants. The administration that think these changes are excellent for half the social-rented sector now won’t apply them to the other half – housing associations – on anything more than a voluntary basis.

Cameron’s big solution to the housing shortage is to invent a new category, “starter homes”, and encourage developers to build them. To do that, he is donating public land and – as of the last spending review – nearly £20bn of taxpayer funds in grants and loans.

Letters: Only when it becomes uneconomic to hoard land, and more support is given to reuse brownfield land, can we hope to start to alleviate the shortage, and bring housing within the reach of the average earner

Developers building homes at up to £450,000 in London and £250,000 in the rest of England will be able to claim them under the rules as “affordable”. As the housing charity Shelter points out, to buy a starter home in the capital by 2020 will require an annual income of £77,000 and a deposit of £98,000. That makes them unaffordable to all but the richest third of Londoners.

This isn’t a serious housing policy. It represents nothing less than a death blow to council housing in central London, and a full-throttle attack on tenants in social housing everywhere. It will hand to big developers tens of billions in taxpayers’ money – for building “affordable” housing that most Britons simply cannot afford. This is ideology at its purest: the thinnest of rhetoric draped around a naked transfer of money and resources from the poor to the rich.